[laughing] wouldn't want to be you. mwah! >> announcer: from nbc news decision 2012. the presidential debates. here is brian williams. good evening. it's estated that upwards of 50 million of us are watching this tonight. the first in the presidential debates in this election cycle between president barack obama and former massachusetts governor mitt romney. the stage is ready in denver, colorado. the university of denver. and all of the expectations management to the contrary, the two men you're going to see tonight are very good debaters. they have four ivy leagu degrees between them, after all, and 50 debates between them, though not against each other

until tonight. there is a critical third man on that stage tonight in denver. that's the moderator, jim lehrer of pbs. he's done a dozen of these. and the rules, which he will announce at the start, give him broad leeway to guide the conversation and the debate. it is a cold room in denver. the campaigns wanted the temperature low. and it's not likely to stay that way once we get under way. both men have been prepping for days. this happens to be the obamas' 20th wedding anniversary. moments ago we saw a warm embrace between mrs. romney and mrs. obama. they both met each other at the front of the hall. their hiss, this is the first of three meetings debate style between these candidates. even though voting is under way in 34 states. we'll throw it to the moderator. >> good evening from the magness arena at the university of denver in denver, colorado. i'm jim lehrer of the pbs news hour, and i welcome you to the

first of the 2012 presidential debates between president barack obama, the democratic nominee, and former massachusetts governor mitt romney, the republican nominee. this debate and the next three, two presidential, one vice presidential, are sponsored by the commission on presidential debates. tonight's 90 minutes will be about domestic issues and will follow a format designed by the commission. there will be six roughly 15-minute segments with two-minute answers for the first question, then open discussion for the remainder of each segment. thousands of people offered suggestions on segment subjects or questions via the internet and other means, but i made the final selections, and for the record, they were not submitted for approval to the commission or the candidates. the segments as i announced in advance will be three on the economy and one each on health

care, the role of government, t on overning. differences, specifics, and choices. both candidates will also have two-minute closing statements. the audience here in the hall has promised to remain silent. no cheers, applause, boos, hisses among other noisy distracting things. so we may all concentrate on what the candidates have to say. there is a noise exception right now, though, as we welcome president obama and governor romney. [ cheers and applause ]

>> jim. >> gentlemen, welcome to you both. let's start, the economy, segment 1, and let's begin with jobs. what are the major differences between the two of you about how you would go about creating new jobs? you have two minutes, each of you have two minutes to start. a coin toss has determined mr. president, you go first. >> well, thank you very much, jim, for this opportunity. i want to thank governor romney and the university of denver for your hospitality. there are a lot of points i want to make tonight, but the most important one is that 20 years ago i became the luckiest man on earth because michelle obama agreed to marry me. and so i just want to wish, sweetie, you happy anniversary and let you know that a year from now we will not be celebrating it in front of 40

million people. you know, four years ago we went through the worst financial crisis since the great depression. millions of jobs were lost. the auto industry was on the brink of collapse. the financial system had frozen up. and because of the resilience and the determination of the american people we've begun to fight our way back. over the last 30 months we've seen 5 million jobs in the private sector created. the auto industry has come roaring back. and housing has begun to rise. but we all know that we've still got a lot of work to do. and so the question here tonight is not where we've been but where we're going. governor romney has a perspective that says if we cut taxes, skewed toward the wealthy, and roll back regulations that we'll be better off. i've got a different view. i think we've got to invest in education and training. i think it's important for us to develop new sources of energy

here in america. that we change our tax code to make sure that we're helping small businesses and companies that are investing here in the united states. that we take some of the money that we're saving as we wind down two wars to rebuild america. and that we reduce our deficit in a balanced way that allows us to make these critical investments. now, it ultimately is going to be up to the voters, to you, which path we should take. are we going to double down on the top-down economic policies that helped to get us into this mess, or do we embrace a new economic patriotism that says america does best when the middle class does best in and i'm looking forward to having that debate. >> governor romney, two minutes. >> thank you, jim. it's an honor to be here with you. and i appreciate the chance to be with the president. i'm pleased to be at the university of denver. appreciate their welcome. and also the presidential commission on these debates. and congratulations to you, mr. president, on your anniversary. i'm sure this was the most romantic place you could imagine, here with me.

so congratulations. this is obviously a very tender topic. i've had the occasion over the last couple of years of meeting people across the country. i was in dayton, ohio, and a woman grabbed my arm and she said i've been out of work since may, can you help me? and yesterday was at a rally in denver and a woman came up to her with a baby in her arms and said, ann, my his has had four jobs in three years, part-time jobs. he's lost his most recent job, and we've now just lost our home. can you help us? and the answer is yes. we can help. but it's going to take a different path. not the one we've been on. not the one the president describes as a top-down cut taxes for the rich. that's not what i'm going to do. my plan has five basic parts. one, us energy independent. north america energy independent. that creates about 4 million jobs. number two, open up more trade, particularly in latin america. crack down on china if and when they cheat. number three, make sure our people have the skills they need

to succeed and the best schools in the world. we're far away from that now. number four, get us to a balanced budget. number five, champion small business. it's small business that creates the jobs in america. and over the last four years small business people have decided that america may not be the place to open a new business because new business start-ups are down to a 30-year low. i know what it takes to get small business growing again, to hire people. now, i'm concerned that the path that we're on has just been unsuccessful. the president has a view very similar to the view he had when he ran four years ago, that a bigger government spending more, taxing more, regulating more, if you will, trickle-down government, would work. that's not the right answer for america. i'll restore the vitality that gets america working again. thank you. >> mr. president, please respond directly to what the governor just said about trickle-down. his trickle-down approach. as he said yours is. >> well, let me talk

specifically about what i think we need to do. first, we've got to improve our education system. and we've made enormous progress drawing on ideas both from democrats and republicans that are already starting to show gains in some of the toughest to deal with schools. we've got a program called race to the top that has prompted reforms in 46 states around the country, raising standards, improving how we train teachers. so now i want to hire another 100,000 new math and science teachers. and create 2 million more slots in our community colleges so that people can get trained for the jobs that are out there right now. and i want to make sure that we keep tuition low for our young people. when it comes to our tax code, governor romney and i bh agree that our corporate tax rate is too high. so i want to lower it. particularly for manufacturing, taking it down to 25%. but i also want to close those

loopholes that are giving incentives for companies that are shipping jobs overseas. i want to provide tax breaks for companies that are investing here in the united states. on energy governor romney and i, we both agree that we've got to boost american energy production. and oil and natural gas production are higher than they've been in years. but i also believe that we've got to look at the energy sources of the future like wind and solar and biofuels and make those investments. so all of this is possible. now, in order for us to do it we do have to close our deficit. and one of the things i'm sure we'll be discussing tonight is how do we deal with our tax code and how do we make sure that we are reducing spending in a responsible way but also how do we have enough revenue to make those investments? and this is where there's a difference because governor romney's central economic plan calls for a $5 trillion tax cut on top of the extension of the bush tax cuts. that's another trillion dollars. and $2 trillion in additional military spending that the military hasn't asked for. that's $8 trillion.

how we pay for that, reduce the deficit, and make the investments that we need to make without dumping those costs onto middle-class americans i think is one of the central questions of this campaign. >> both of you have spoken about a lot of different things. we're going to try to get through them in as specific a way as we possibly can. but first, governor romney, do you have a question that you'd like to ask the president directly about something he just said? >> well, sure. i'd like to clear up the record and go through piece by piece. first of all, i don't have a $5 trillion tax cut. i don't have a tax cut of the scale that you're talking about. my view is that we ought to provide tax relief to people in the middle class. but i'm not going to reduce the share of taxes paid by high-income people. high-income people are doing just fine in this economy. they'll do fine whether you're president or i am. the people who are having a hard time now are middle income americans. under the president's policies middle income americans have been buried. they've just been crushed. middle-income americans have seen their income come down by

$4,300. this is a tax in and of itself. i'll call it the economy tax. it's been crushing. the same time gasoline prices have doubled under the president. electric rates are up. food prices are up. health care costs have gone up by $2,500 a family. middle-income familie are being crushed and so the question is how to get them going again. and i've described it. it's energy and trade. the right kind of training programs. balancing our budget and helping small business. those are the cornerstones of my plan. but the president mentioned a couple of other ideas. i'll just note, first education. i agree. education is key. particularly the future of our economy. but our training programs right now, we've got 47 of them housed in the federal government, reporting to eight different agencies. overhead is overwhelming. we've got to get those dollars back to the states and go to the workers so they can create their own pathways to get in the training they need for jobs that will really help them. the second area, taxation. we agree, we ought to bring the tax rates down. and i do.

both for corporations and for individuals. but in order for us not to lose revenue and have the government run out of money, i also lower deductions and credits and exemptions so that we keep taking in the same money when you also account for growth. the third area, energy. energy is critical. and the president pointed out correctly that production of oil and gas in the u.s. is up. but not due to his policies. in spite of his policies. mr. president, all of the increase in natural gas and oil has happened on private land, not on government land. on government land your administration has cut the number of permits and licenses in half. if i'm president, i'll double them. and also get the oil from offshore in alaska. and i'll bring that pipeline in from canada. and by the way, i like coal. i'm going to make sure we can continue to burn clean coal. people in the coal industry feel like it's getting crushed by your policies. i want to get america and north america energy independent so we can create those jobs. and finally, with regards to

that tax cut, look, i'm not looking to cut massive taxes and to reduce the revenues going to the government. my number one principle is there will be no tax cut that adds to the deficit. i'll underline that. no tax cut that adds to the deficit. but i do want to reduce the burden being paid by middle-income americans. and to do that that also means i cannot reduce the burden paid by high-income americans. so any language to the contrary is simply not accurate. >> mr. president? >> well, i think what -- let's talk about taxes because i think it's instructive. now, four years ago when i stood on this stage i said that i would cut taxes for middle-class families. and that's exactly what i did. we cut taxes for middle-class families by about $3,600. and the reason is because i believe that we do best when the middle class is doing well. and by giving them those tax

cuts they had a little more money in their pocket. so maybe they can buy a new car. they are certainly in a better position to weather the extraordinary recession we went through. maybe they can buy a computer for their kid who's going off to college. which means they're spending more money, businesses have more customers, businesses make more profits, and then hire more workers. now, governor romney's proposal that he's been promoting for 18 months calls for a $5 trillion tax cut on top of $2 trillion of additional spending for our military. and he is saying that he is going to pay for it by closing loopholes and deductions. the problem is that he's been asked over 100 times how you would close those deductions and loopholes and he hasn't been able to identify them. but i'm going to make an important point here, jim. when you add up all the loopholes and deductions that upper-income individuals are currently taking advantage of, you take those all away, you don't come close to pay for $5

trillion in tax cuts and $2 trillion in additional military spending. and that's why independent studies looking at this said the only way to meet governor romney's pledge of not reducing the deficit, or not adding to the deficit is by burdening middle-class families, the average middle-class family with children would pay about $2,000 more. now, that's not my analysis. that's the analysis of economists who have looked at this. and that kind of top-down economics where folks at the top are doing well so, the average person making 3 million bucks is getting a $250,000 tax break while middle-class families are burdened further, that's not what i believe is a recipe for economic growth. >> what is the difference? let's just stay on -- >> right. >> let's just stay on taxes for a moment. >> well, but -- >> what is -- >> virtually everything he just said about my tax plan is inaccurate. so if the tax plan he described were a tax plan i was asked to support, i'd say absolutely not.

i'm not looking for a $5 trillion tax cut. what i've said is i won't put in place a tax cut that adds to the deficit. that's part one. so there's no economist can say mitt romney's tax plan adds 5 trillion if i say i will not add to the deficit with my tax plan. number two, i will not reduce the share paid by high-income individuals. i know that you and your running mate keep saying that. and i know it's a popular thing to say with a lot of people. but it's just not the case. look, i've got five boys. i'm used to people saying something that's not always true but just keep on repeating it and ultimately hoping i'll believe it. but that is not the case. all right? i will not reduce the taxes paid by high-income americans. and number 3, i will not under any circumstances raise taxes on middle-income families. i will lower taxes on middle-income families. now, you cite a study. there are six other studies that looked at the study you described and say it's completely wrong. i saw a study that came out today that said you'r going to raise taxes by $3,000 to $4,000 on middle-income families.

there are all these studies out there. but let's get at the bottom line. that is i want to bring down rates. i want to bring down rates, at the same time lower deductions, exemptions and credits and so forth so we keep getting the revenue we need. then why lower the rates? and the reason is because small business pays that individual rate. 54% of america's workers work in businesses that are taxed not at the corporate tax rate but at the individual tax rate. and if we lower that rate they will be able to hire more people. for me this is about jobs. this is about getting jobs for the american people. >> yeah. do you challenge whathe governor just said about his own plan? >> well, for 18 months he's been running on this tax plan. and now, five weeks before the election, he's saying that his big bold idea is never mind. and the fact is that if you are lowering the rates the way you

describe, governor, then it is not possible to come up with enough deductions and loopholes that only affect high-income individuals to avoid either raising the deficit or burdening the middle class. it's math. it it's arithmetic. now, governor romney and i do share an interest in encouraging small business growth. so at the same time that my tax plan has already lowered taxes for 98% of families, i also lowered taxes for small businesses 18 times. and what i want to do is continue the tax rates, the tax cuts that we put into place for small businesses and families. but i have said that for incomes over $250,000 a year that we should go back to the rates that we had when bill clinton was president, when we created 23 million new jobs, went from deficit to surplus, and created a whole lot of millionaires to boot. and the reason this is important

is because by doing that we can not only reduce the deficit, we can not only encourage job growth through small businesses but we're also able to make the investments that are necessary in education or in energy. and we do have a difference, though, when it comes to definitions of small business. now, under my plan 97% of small businesses would not see their income taxes go up. governor romney says, well, those top 3%, they're the job creators, they'd be burdened. but under governor romney's definition there are a whole bunch of millionaires and billionaires who are small businesses. donald trum subpoena a small business. i know donald trump doesn't like to think of himself as small anything. but that's how you define small businesses if you're getting business income. and that kind of approach i believe will not grow our economy because the only way to pay for it without either burdening the middle class or blowing up our deficit is to

make drastic cuts in things like education, making sure that we are continuing investment in basic science and research, all the things that are helping america grow. and i think that would be a mistake. >> jim, let me just come back on that point. >> yes -- >> small businesses we're talking about -- >> excuse me. just so everybody understands, we're way over our first 15 minutes. >> it's fun, isn't it? >> it's okay. it's great. >> no problem. you don't have the time. i don't have the time because we're still on the economy. we're going to come back to taxes and we're going to move on to the deficit and a lot of other things, too. but go ahead, sir. >> you bet. president -- mr. president, you're absolutely right, which is in regards to 90% of the businesses are not taxed at the 35% tax rate, they're taxed at a lower rate. but those business that's are in the last 3% of businesses happen to employ half, half of all the people who work in small business. those are the business that's employ 1/4 of all the workers in

america. and your plan is to take their tax rate from 35% to 40%. now, i talked to a guy who has a very small business. he's in an electronics business in st. louis. he has four employees. he said he and his son calculated how much they pay in taxes. federal income tax, federal payroll tax, state income tax, state sales tax, state property tax, gasoline tax. it added up to well over 50% of what they earned. and your plan is to take the tax rate on successful small businesses from 35% to 40%. the national federation of independent businesses has said that will cost 700,000 jobs. i don't want to cost jobs. my priority is jobs. and so what i do is i bring down the tax rates, lower deductions and exemptions. the same idea behind bowles simpson, by the way, get the rates down, lower exemptions to create jobs. because there's nothing better to get to us a balanced budget than to have more people

working, earning more money, paying more taxes. that's by far the most effective and efficient way to get this budget balanced. >> jim, you may want to move on to another topic, but i would just say this to the american people. if you believe that we can cut taxes by $5 trillion and add $2 trillion in additional spending that the military is not asking for, $7 trillion, just to give you a sense over ten years, that's more than our entire defense budget, and you think that by closing loopholes and deductions for the well-to-do somehow you will not end up picking up the tab, then governor romney's plan may work for you. but i think math, common sense, and our history shows us that's not a recipe for job growth. look, we've tried this. we've tried both approaches. the approach that governor romney's talking about is the same sales pitch that was made in 2001 and 2003.

and we ended up with the slowest jobs growth in 50 years. we ended up moving from surplus to deficits. and it all culminated in the worst financial crisis since the great depression. bill clinton tried the approach that i'm talking about. we created 23 million new jobs. we went from deficit to surplus. and businesses did very well. so in some ways we've got some data on which approach is more likely to create jobs and opportunity for americans. and i believe that the economy works best when middle-class families are getting tax breaks so that they've got some money in their pockets. and those of us who've done extraordinarily well because of this magnificent country that we live in, that we can afford to do a little bit more to make sure we're not blowing up the deficit. >> jim, the president began this segment. so i think i get the last word -- >> you're going to get the first word in the next segment. >> but he gets the first word of that segment. i get the last word of that -- i

hope. let me just make this comment. let me repeat what i said. i'm not in favor of a $5 trillion tax cut. that's not my plan. my plan is not to put in place any tax cut that will add to the deficit. that's point one. so you may keep referring to it as a $5 trillion tax cut, but that's not my plan. >> okay. >> number two, let's look at history. my plan is not like anything that's been tried before. my plan is to bring down rates but also bring down deductions and exemptions and credits at the same time so the revenue stays in but that we bring down rates to get more people working. my priority is putting people back to work in america. they're suffering in this country. and we talked about evidence. look at the evidence of the last four years. it's absolutely extraordinary. we've got 23 million people out of work or stopped looking for work in this country -- >> all right. >> we've got -- when the president took office, 32 million people on food stamps. 47 million on food stamps today. economic growth this year slower

than last year. and last year slower than the year before. going forward with the status quo is not going to cut it for the american people who are struggling today. >> all right. let's talk -- we're still on the economy. this is theoretically now a second segment, still on the economy. and specifically on what to do about the federal deficit. the federal debt. and the question -- you each have two minutes on this. and governor romney, you go first because the president went first on segment one. and the question is this -- what are the differences between the two of you as to how you would go about tackling the deficit problem in this country? >> i'm glad you raised that. and it's a critical issue. i think it's not just an economic issue. i think it's a moral issue. i think it's frankly not moral for my generation to keep spending massively more than we take in, knowing those burdens are going to be passed on to the next generation and they're going to be paying the interest

and the principal all their lievg lives. and the amount of debt we're adding at a trillion a year is simply not moral. how do we deal with it? well, mathematically there are three ways that you can cut a deficit. one of course is to raise taxes. number two is to cut spending. and number three is to grow the economy. because if more people work in a growing economy they're paying taxes and you can get the job done that way. the president would prefer raising taxes. i understand. the problem with raising taxes is that it slows down the rate of growth. and you could never quite get the job done. i want to lower spending and encourage economic growth at the same time. what things would i cut from spending? well, first of all, i will eliminate all programs by this test if they don't pass it. is the program so critical it's worth borrowing money from china to pay for it? and if not i'll get rid of it. obama care's on my list. i apologize, mr. president. i use that term with all respect. >> i like it. >> okay. i'll get rid of that. i'm sorry, jim, i'm going to stop t subsidy to pbs.

i like pbs. i like big bird. i actually like you too. but i'm not going to keep spending money on things to borrow money from china to pay for. number one. number two, i'll take programs that are currently good programs but i think could be run more efficiently at the state level and send them to state. number three, i'll make government more efficient and cut back the number of employees, combine some agencies and departments. my cutbacks will be done through attrition, by the way. this is the approach we have to take to get america to a balanced budget. the president said he'd cut the deficit in half. unfortunately, he doubled it. trillion-dollar deficits for the last four years. the president's put in place as much public debt, almost as much debt held by the public as all prior presidents combined. >> mr. president, two minutes. >> when i walked in the oval office, i had more than a trillion-dollar deficit greeting me. and we know where it came from. two wars that were paid for on a credit card. two tax cuts that were not paid

for. and a whole bunch of programs that were not paid for. and then a massive economic crisis. and despite that, what we've said is yes, we had to take some initial emergency measures to make sure we didn't slip ton a great depression. but what we've also said is let's make sure that we are cutting out those things that are not helping us grow. so 77 government programs. everything from aircrafts that the air force had ordered but weren't working very well. 18 government programs for education that were well intentioned but weren't helping kids learn. we went after medical fraud in m medicare and medicaid very aggressively, more aggressive than ever before. and have said tens of billions of dollars. $15 billion of waste taken out of the system. and i worked with democrats and republicans to cut a trillion dollars out of our discretionary domestic budget. that's the largest cut in the

discretionary domestic budget since dwight eisenhower. now, we all know that we've got to do more. and so i've put forward a specific $4 trillion deficit reduction plan. it's on a website. you can look at all the numbers. what cuts we make and what revenue we raise. and the way we do it is $2.50 for every cut we ask for a dollar of additional revenue paid for, as i indicated earlier, by asking those of us who have done very well in this country to contribute a little bit more to reduce the deficit. and governor romney earlier mentioned the bowles-simpson commission. that's how the commission -- bipartisan commission that talked about how we should move forward suggested we have to do it. in a balanced way with some revenue and some spending cuts. and this is a major difference that governor romney and i have. let me just finish this point because you're looking for contrast. you know, when governor romney stood on a stage with other republican candidates for the

nomination and he was asked, would you take $10 of spending cuts for just $1 of revenue? and he said no. now, if you take such an unbalanced approach, then that means you are going to be gutting our investments in schools and education. it means that governor romney's talked about medicaid and how we could send it back to the states, but effectively, this means a 30% cut in the primary program we held for seniors who are in nursing homes, for kids who are with disabilities -- >> mr. president -- >> -- and that is not a right strategy to move forward. >> way over the two minutes. >> sorry. >> governor, what about simpson-bowles? >> simpson-bowles. the president should have grabbed p that. >> do you support simpson-bowles? >> i have my own plan. but in my view the president should have grabbed, that if he wanted to make some adjustments to it, take it, go to congress, fight for it. >> that's what we've done. made some adjustments to it.

and we've -- >> but you've been president four years. you said you'd cut the deficit in half. it's now four years later. we still have trillion-dollar deficits. the cbo says we'll have a trillion-dollar deficit each of the next four years. if you're re-elected we'll get to a trillion-dollar debt. you have said before you'd cut the deficit in half. and this -- i love this idea of 4 trillion in cuts, you found $4 trillion of ways to reduce or to get closer to a balanced budget except we still show trillion-dollar deficits every year. that doesn't get the job done. let me come back and say why is it that i don't want to raise taxes? why i don't want to raise taxes on people. and actually, you said it. back in 2010 you said look, i'm going to extend the tax policies at we have now. i'm not going to raise taxes on anyone because when the economy's going slow like this, when we're in recession you shouldn't raise taxes on anyone. well, the economy is still growing slow. as a matter of fact, it's growing much more slowly now than when you made that statement. and so if you believe the same thing, you just don't want to raise taxes on people, and the

reality is it's not just wealthy people -- you mentioned donald trum. it's not just donald trump you're taxing. it's all those businesses that employ 1/4 of the workers in america, these small business that's are taxed as individuals. you raise taxes and you kill jobs. that's why the national federation of independent businesses said your plan will kill 700,000 jobs. i don't want to kill jobs in this environment. i'll make one more point -- >> no, no. you mentioned the taxes thing for a moment. mr. president. >> well, we've had this discussion before. >> about the idea that in order to reduce the deficit there has to be revenue in addition to cuts. >> there has to be revenue in addition to cuts. now, governor romney has ruled out revenue. >> absolutely. >> so -- >> look, the revenue i get is by more people working, getting higher pay, paying more taxes. that's how we get growth and how we balance the budget. >> right. >> but the idea of taxing people more, putting more people out of work, you'll never get there.

you never balance the budget by raising taxes. spain -- spain spends 42% of their total economy on government. >> okay. >> we're now spending 42% of our economy on government. i don't want to go down the path to spain. i want to go down the path of growth to puts americans to work with more money coming in because they're working. >> but mr. president, you're saying in order to get it -- the job done it's got to be balanced. >> if we're serious, we've got to take a balanced, responsible approach. and by the way, this is not just when it comes to individual taxes. let's talk about corporate taxes. no i've identified areas where we can right away make a change that i believe would actually help the economy. the oil industry gets $4 billion a year in corporate welfare. basically, they get deductions that those small business that's governor romney refers to, they don't get. now, does anybody think that exxonmobil needs some extra

money when they're making money every time you go to the pump? why wouldn't we want to eliminate that? why wouldn't we eliminate tax breaks for corporate jets? my attitude is if you've got a corporate jet you can probably afford to pay full freight, not get a special break for it. when it comes to corporate taxes, governor romney has said he wants to in a revenue-neutral way close loopholes, deductions. he hasn't identifhichied w ones they are. but thereby bring down the corporate rate. well, i want to do the same thing. but i've actually identified how we can do that. and part of the way to do it is to not give tax breaks to companies that are shipping jobs overseas. right now you can actually take a deduction for moving a plant overseas. i think most americans would say that doesn't make sense. and all that raises revenue. and so if we take a balanced approach, what that then allows

us to do is also to help young people, the way we already have during my administration, make sure they can afford to go to college. it means that the teacher that i met in las vegas, a wonderful young lady who describes to me she's got 42 kids in her class, the first two weeks she's got some of them sitting on the floor. until finally they get reassigned. they're using textbooks that are ten years old. that is not a recipe for growth. that's not how america was built. and so budgets reflect choices. ultimately, we're going to have to make some decisions. and if we're asking for no revenue, then that means that we've got to get rid of a whole bunch of stuff. and the magnitude of the tax cuts that you're talking about, governor, would end up resulting in severe hardship for people but more importantly would not help us grow. as i indicated before, when you talk about shifting medicaid to states, we're talking about potentially a 30 -- a 30% cut in

medicaid over time. now, that may not seem like a big deal when it just is, you know, numbers on a sheet of paper. but if we're talking about a family who's got an autistic kid and is depending on that medicaid, that's a big problem. and governors are creative. there's no doubt about it. but they're not creative enough to make up for a 30% deficit on something like medicaid. what ends up happening is some people end up not getting help. >> jim, we've gone on a lot of topics. it will take a minute to go from medicaid to school to oil to tax breaks to companies going overseas. let's go one by one. first of all, the department of energy has said the tax break for oil companies is $2.8 billion a year. and it's actually an accounting treatment, as you know, that's been in place for 100 years. >> it's time to end it. >> and in one year you provided $90 billion in breaks to the green energy world. now, i like green energy as

well. but that's about 50 years' worth of what oil and gas receives. and you say exxon and mobil. actually, this $2.8 billion goes largely to small companies, to drilling operators and so forth. but if we get that tax rate from 35% down to 25%, why, that $2.8 billion is on the table. of course it's on the table. that's probably not going to survive, you get that rate down to 25%. but don't forget, you put $90 billion, like 50 years' worth of breaks, into solar and wind. solyndra and fisker and tesla and enter one. i had a friend who said you don't just pick the winners and losers, you pick the losers. so this is not the kind of policy you want to have to get america energy secure. the second topic, which is you said you get a deduction for taking a plant overseas. look, i've been in business for 25 years. i have no idea what you're talking about. i maybe need to get a new accountant. but the idea that you get a break for shipping jobs overseas is simply not the case. what we do have right now is

bringing money from overseas back to this country. and finally, medicaid to states. i'm not quite sure where that came in except this. i would like to take the medicaid dollars that go to states and say to a state you're going to get what you got last year plus inflation, plus 1%, and then you're going to manage your care for your poor in the way you think best. and i remember as a governor when this idea was floated by tommy thompson the governors, republican and democrats, said please let us do that. we can care for our own poor in so much better and more effective a way than having the federal government tell us how to care for our poor. so let's -- one of the magnificent things about this country is the whole idea that states are the laboratories of democracy. don't let the federal government tell everybody what kind of training programs they have to have and what kind of medicaid they have to have. let states do this. and by the way, if a state gets in trouble, we could step in and see if we could find a way to help them.

but the right approach is one which relies on the brilliance of our people and states, not the federal government. >> we're going still on the economy but another part of it. >> okay. >> all right? this is segment 3, the economy. entitlements. first answer goes to you, two minutes, mr. president. do you see a major difference between the two of you on social security? >> you know, i suspect that on social security we've got a somewhat similar position. social security is structurally sound. it's going to have to be tweaked the way it was by ronald reagan and speaker -- democratic speaker tip o'neill. but the basic structure is sound. but i want to talk about the values behind social security and medicare. and then talk about medicare because that's the big driver of our deficits right now. my grandmother, some of you know, helped to raise me. my grandparents did. my grandfather died a while

back. my grandmother died three days before i was elected president. and she was fiercely independent. she worked her way up only had a high school education, started as a secretary, ended up being the vice president of a local bank. and she ended up living alone by choice. and the reason she could be independent was because of social security and medicare. she had worked all her life, put in this money, and understood that there was a basic guarantee, a floor under which she could not go. and that's the perspective i bring when i think about what's called entitlements. the name itself implies some sense of dependency on the part of these folks. these are folks who've worked hard. like my grandmother. and there are millions of people out there who are counting on this. so my approach is to say how do we strengthen the system over the long term? and in medicare what we did was we said we are going to have to bring down the costs if we're going to deal with our long-term deficits. but to do that let's look where

some of the money's going. $716 billion we were able to save from the medicare program by no longer overpaying insurance companies, by making sure that we weren't overpaying providers, and using that money, we were actually able to lower prescription drug costs for seniors by an average of $600, and we were also able to make a significant dent in providing them the kind of preventive care that will ultimately save money through the system. so the way for us to deal with medicare in particular is to lower health care costs. when it comes to social security, as i've said, you don't need a major structural change in order to make sure social security's there for the future. >> i'll follow up on this. first, governor romney, you have two minutes on social security and entitlements. >> well, jim, our seniors depend on these programs, and i know anytime we talk about entitlements people become concerned that something's going to happen that's going to change their life for the worst.

and the answer is neither the president nor i are proposing any changes for any current retirees or near-retirees either to social security or medicare. so if you're 60 or around 60 or older, you don't need to listen any further. but for younger people we need to talk about what changes are going to be occurring. oh, i just thought about one. and that is in fact i was wrong when i said the president isn't proposing any changes for current retirees. in fact, he is on medicare. on social security he's not. but on medicare for current retirees he's cutting $716 billion from the program. now, he says by not overpaying hospitals and oviders. actually, just going to them and saying we're going to reduce the rates you get paid across the board, everybody's going to get a lower rate, that's not just going after places where there's abuse, that's saying we're cutting the rates. some 15% of hospitals and nursing homes say they won't take any more medicare patients under that scenario. we also have 50% of doctors who say they won't take more medicare patients.

this -- we have 4 million people on medicare advantage that will lose medicare advantage because of those $716 billion in cuts. i can't understand how you can cut medicare $716 billion for current recipients of medicare. now, you point out, well, we're putting some back, we're going to give a better prescription program. that's one dollar for every 15 you've cut. they're smart enough to know that's not a good trade. i want to take that $716 billion you've cut and put it back into medicare -- by the way, we can include a prescription program if we need to improve it. but the idea of cutting $716 billion from medicare to be able to balance the additional cost of obama care is in my opinion a mistake. and with regards to young people coming along, i've got proposals to make sure medicare and social security are there for them without any question. >> mr. president. >> first of all, i think it's important for governor romney to present this plan that he says will only affect folks in the

future. and the absence of the plan is that he would turn medicare into a voucher program. it's called premium support. but it's understood to be a voucher program. it has -- >> and you don't support that? >> i don't. and let me explain why. >> again, that's for future -- >> i understand. >> not for current retirees. >> so if you're 54 or 55, you might want to listen because this will affect you. the idea, which was originally presented by congressman ryan, your running mate, is that we would give a voucher to seniors and they could go out in the private marketplace and buy their own health insurance. the problem is that because the voucher wouldn't necessarily keep up with health care inflation it was estimated that this would cost the average senior about $6,000 a year. now, in fairness, what governor romney has now said is he'll maintain traditional medicare

alongside it. but there's still a problem because what happens is those insurance companies are pretty clever at figuring out who are the younger and healthier seniors. they recruit them. leaving the older, sicker seniors in medicare. and every health care economists who looks at it says over time what will happen is the traditional medicare system will collapse. and then what you've got is folks like my grandmother at the mercy of the private insurance system precisely at the time when they are most in need of decent health care. so i don't think vouchers are the right way to go. and this is not my own -- only my opinion. aarp thinks that the savings that we obtained from medicare bolstered the system, lengthened the medicare trust fund by eight years, benefits were not affected at all, and ironically, if you repeal obama care, and i have become fond of this term, obama care, if you repeal it,

what happens is those seniors right away are going to be paying $600 more in prescription care. they're now going to have to be paying co-pays for basic checkups that can keep them healthier. and the primary beneficiary of that repeal are insurance companies that are estimated to gain billions of dollars back when they aren't making seniors any healthier. and i don't think that's the right approach when it comes to making sure that medicare is stronger over the long term. >> we'll talk about -- specifically about health care in a moment. but do you support the voucher system, governor? >> what i support is no change for current retirees and near-retirees to medicare. and the president supports taking $716 billion out of that program. >> what about the vouchers? >> that's number one. >> all right. >> number two is for people coming along that are young. what i do to make sure that we can keep medicare in place for them is to allow them either to choose the current medicare

program or a private plan. their choice. they get to -- and they'll have at least two plans that will be entirely at no cost to them. so they don't have to pay additional money. no additional $6,000. that's not going to happen. they'll have at least two plans. and by the way, if the government can be as efficient as the private sector and offer premiums that are as low as the private sector, people will be happy to get traditional medicare. or they'll be able to get a private plan. i know my own view is i'd rather have a private plan. i'd just as soon not have the government tell me what kind of health care i want to get. i'd rather have an insurance company, if i don't like them i can get rid of them and find a different insurance company. but people make their own choice. the other thing we have to do to save medicare, we have to have the benefits high for those that are low-income, but for higher-income people we're going to have to lower some of the benefits. we have to make sure this program is there for the long term. that's the plan that i put forward. and by the way, the idea came not even from paul ryan or senator wyden, who's a co-author of the bill with paul ryan in the senate, but also it came from bill clinton's chief of

staff. this is an idea that's been around a long time, which is saying hau, let's see if we can't get competition into the medicare world so that people can get a choice of different plans at lower cost, better quality. i believe in competition. >> jim, if i can just respond very quickly, first of all, every study has shown that medicare has lower administrative costs than private insurance does. which is why seniors are generally pretty happy with it. and private insurers have to make a profit. nothing wrong with that. that's what they do. and so you've got higher administrative costs plus profit on top of that. and if you are going to save any money through what governor romney is proposing, what has to happen is the money has to come from somewhere. and when you move to a voup evo system, you are putting seniors at the mercy of those insurance companies. and over time if traditional

medicare has decayed or fallen apart then they're stuck. and this is the reason why aarp has said that your plan would weaken medicare substantially, and that's why they were supportive of the approach that we took. one last point i want to make. we do have to lower the costs of health care, not just in medicare, but overall. >> okay. >> that's a big topic. could we -- >> we're going to -- i want to get to it. but all i want to do is very quickly -- >> let's get back to medicare. the president has said the government can provide the service at lower cost and without a profit. >> all right. >> if that's the case, then it will always be the best product that people can purchase. >> wait a minute, governor. >> my experience is the private sector typically is able to provide a better product at a lower cost. >> can the two of you agree that the voters have a choice, a clear choice between the two of you on medicare? >> absolutely. >> all right. so to finish quickly, briefly on the economy, what is your view

about the level of federal regulation of the economy right now? is there too much? and in your case, mr. president, should there be more? beginning with you. this is not a new two-minute segment. just start and we'll go for a few minutes and then we're going to go to health care. okay? >> regulation is essential. you can't have a free market work if you don't have regulation. as a business person i had to have -- i needed to know the regulations. i needed them there. you couldn't have people opening up banks in their garage and making loans. you have to have regulations. so that you can have an economy work. every free economy has good regulation. at the same time regulation could become excessive. >> is it excessive now? >> in some places. >> like where? >> it can become out of sedate. and what's happened with some of the legislation that's been passed during the president's term, you've seen regulation become excessive, and it's hurt the economy. let me give you an example. dodd-frank was passed, and it

includes within it a number of provisions that i think have some unintended consequences that are harmful to the economy. one is it designates a number of banks as too big to fail. and they're effectively guaranteed by the federal government. this is the biggest kiss that's been given to new york banks i've ever seen. this is an enormous boon for them. there have been 122 community and small banks have closed since dodd-frank. so there's one example. here's another. in -- >> you want to repeal dodd-frank? >> i would repeal and replace it. we're not going to get rid of all regulation. you have to have regulation. and there are some parts of dodd frank that make all the sense in the world. you need transparency. you need to have leverage limits for -- >> here's a specific. >> let's -- let me mention the other one. >> no. let's not. let's let him respond to this specific on dodd-frank and what the governor just said. >> i think this is a great example. the reason we have been in such an enormous economic crisis was

prompted by reckless behavior across the board. now, it wasn't just on wall street. u had loan officers that were given loans and mortgages that really shouldn't have been given because the folks didn't qualify. you had people who were borrowing money to buy a house that they couldn't afford. you had credit agencies that were stamping these as a-1 great investments when they weren't. but you also had banks making money hand over fist, churning out products that the bankers themselves didn't even understand in order to make big profits but knowing that it made the entire system vulnerable. so what did we do? we stepped in and had the toughest reforms on wall street since the 1930s. we said you've got banks you've got to raise your capital requirements. you can't engage in some of this risky behavior that is putting main street at risk. we've got to make sure you have a living will so we can know how

you're going to wind things down if you make a bad bet so we don't have other taxpayer bailouts. in the meantime, by the way, we also made sure that all the help that we provided those banks was paid back every single dime with interest. now, governor romney has said he wants to repeal dodd-frank. and i appreciate, and it appears we've got some agreement that a marketplace to work has to have some regulation. but in the past governor romney has said he just wants to repeal dodd-frank, roll it back. so the question is does anybody out there think that the big problem we had is that there was too much oversight and regulation of wall street? because if you do then governor romney is your candidate. but that's not what i believe. >> that's just not the facts. look, we have to have regulation on wall street. that's why i'd have regulation. but i wouldn't designate five

banks as too big to fail and give them a blank check. that's one of the unintended consequences of dodd-frank. it wasn't thought through properly. we need to get rid of that provision because it's killing regional and small banks. they're getting hurt. let me mention another regulation in dodd-frank. you say we were giving mortgages to people who weren't qualified. that's exactly right. it's one of the reasons for the great financial calamity we had. and so dodd-frank correctly says we need to have qualified mortgages and if you give a mortgage that's not qualified there are big penalties. except they didn't ever go on and define what a qualified mortgage was. >> all right. >> it's been two years. we don't know what a qualified mortgage is yet. so banks are reluctant to make loans, mortgages. try and get a mortgage these days. it's hurt the housing market because dodd-frank didn't anticipate putting in place the kinds of regulations you have to have. it's not that dodd-frank always was wrong with too much regulation. sometimes they didn't come out with a clear regulation. i will make sure we don't hurt the functioning of our

marketplace and our businesses because i want to bring back housing and get good jobs. >> all right. i think we have another clear difference between the two of you. now let's move to health care, where i know there is a clear difference. and that has to do with the affordable care act, obama care. and it's a new segment, and that means two minutes epa, and yach go first, governor romney. you want the affordable care act repealed. why? >> i sure do. in part it comes, again, from my experience. i was in new hampshire. a woman came to me and said look, i can't afford insurance for myself or my son. i met a couple in appleton, wisconsin and they said we're thinking of dropping our insurance, we can't afford it. and the number of small businesses i've gone to that are saying they're dropping insurance because they can't afford it. the cost of health care is just prohibitive. and we've got to deal with cost. and unfortunately, when you look at obama care, the congressional

budget office has said it will cost $2,500 a year more than traditional insurance. so it's adding to cost. and as a matter of fact, when the president ran for office, he said that by this year he would have brought down the cost of insurance for each family by $2,500 a family. instead, it's gone up by that amount. so it's expensive. expensive things hurt families. so that's one reason i don't want it. second reason, it cuts $716 billion from medicare to pay for it. i want to put that money back in medicare for our seniors. number three, it puts in place an unelected board that's going to tell people ultimately what kind of treatments they can have. i don't like that idea. fourth, there was a survey done of small businesses across the country. said what's been the effect of obama care on your hiring plans? and 3/4 of them said it makes us less likely to hire people. i just don't know how the president could come into office facing 23 million people out of work, rising unemployment, an

economic crisis at the kitchen table, and spend his energy and passion for two years fighting for obama care instead of fighting for jobs for the american people. it has killed jobs. and the best course for health care is to do what we did in my state, craft a plan at the state level that fits the needs of the state and then let's focus on getting the costs down for people rather than raising it with a $2,500 additional premium. >> mr. president, the argument against repeal. >> well, four years ago when i was running for office i was traveling around and having those same conversations that governor romney talks about. and it wasn't just that small businesses were seeing costs skyrocket and they couldn't get affordable coverage even if they wanted to provide it to their employees. it wasn't just that this was the biggest driver of our federal deficit, our overall health care costs, but it was families who were worried about going bankrupt if ty got sick. millions of families all across

the country. they had a pre-existing condition, they might not be able to get coverage at all. if they did have coverage, insurance companies might impose an arbitrary limit. and so as a consequence they're paying their premiums, somebody gets really sick, lo and behold, they don't have enough money to pay the bills because the insurance companies say they've hit the limit. so we did work on this alongside working on jobs because this is part of making sure that middle-class families are secure in this country. and let me tell you exactly what obama care did. number one, if you've got health insurance, it doesn't mean a government takeover. you keep your own insurance. you coop yokeep your own doctor. but it does say insurance companies can't jerk you around. they can't impose arbitrary lifetime limits. they have to let you keep your kid on their insurance -- your insurance plan until they're 26 years old.

and it also says that you're going to have to get rebates if insurance companies are spending more on administrative costs and profits than they are on actual care. number two, if you don't have health insurance, we're essentially setting up a group plan that allows you to benefit from group rates that are typically 18% lower than if you're out there trying to get insurance on the individual market. now, the last point i'd make before -- >> two minutes is up, sir. >> no, i think -- i had five seconds before you interrupted me. was the irony is we've seen this model work really well in massachusetts because governor romney did a good thing, working with democrats in the state to set up what is essentially the identical model, and as a consequence people are covered there. it hasn't destroyed jobs.

and as a consequence we now have a system in which we have the opportunity to start bringing down costs as opposed to just leaving millions of people out in the cold. >> your five seconds went away a long time ago. all right, governor. governor, it will the president directly why you think what he just said is wrong about obama care. >> well, i did with my first statement. >> you did. >> i'll go on. first of all, i like the way we did it in massachusetts. i like the fact that in my state we had republicans and democrats come together and work together. what you did instead was to push through a plan without a single republican vote. as a matter of fact, when massachusetts did something quite extraordinary, elected a republican senator to stop obama care, you pushed it through anyway. so entirely on a partisan basis, instead of bringing america together and having a discussion on this important topic, you pushed through something that you and nancy pelosi and harry reid felt was the best answer and drove it through. what we did in a legislature 87%

democrat, we worked together. 200 legislators in my legislature, only two voted against the plan by the time we were finished over some differences. we didn't raise taxes. you raised them by a trillion dollars under obama care. we didn't cut medicare. of course we didn't have medicare. but we didn't cut medicare by $716 billion. we didn't put in place a board that can tell people ultimately what treatments they're going to receive. we didn't also do something that i think a number of people across this country recognize, which is put people in a position where they're going to lose the insurance they had and they wanted. right now the cbo says up to 20 million people will lose their insurance as obama care goes into effect next year. and likewise, a study by mckinsey and company of american businesses said 30% of them are anticipating dropping people from coverage. so for those reasons, for the tax, for medicare, for this board, and for people losing their insurance, this why the american people don't want medicare -- don't want obama

care. it's why republicans said do not do this. and the republicans had a plan. they put a plan out. they put a plan, a bipartisan plan. it was swept aside. i think something this big, this important has to be done on a bipartisan basis and we have to have a president who can reach across the aisle and fashion important legislation with the input from both parties. >> governor romney said this has to be done on a bipartisan baasis. this was a bipartisan idea. in fact it was a republican idea. governor romney at the beginning of his debate said what we did in massachusetts could be a model for the nation. and i agree that the democratic legislators in massachusetts might have given some advice to republicans in congress about how to cooperate. but the fact of the matter is we use the same advisers and they say it's the same plan. when governor romney talks about

this board, for example, this unelected board, what this is is a group of doctors, health care experts, et cetera, to figure out how can we reduce the cost of care in the system overall. because there are two ways of dealing with our health care crisis. one is to simply leave a whole bunch of people uninsured and let them fend for themselves, to let businesses figure out how long they can continue to pay premiums until finally they just give up and their workers are no longer getting insured. and that's been the trend line. or alternatively, we can figure out how do we make the cost of care more effective? and there are ways of doing it. so at cleveland clinic, one of the best health ce systems in the world, they actually provide great care cheaper than average. and the reason they do is because they do some smart things. they say if patient's coming in let's get all the doctors together at once, do one test instead of having the patient run around with ten tests.

let's make sure we're providing preventive care so we're catching the onset of something like diabetes. let's pay providers on the basis of performance as opposed to on the basis of how many procedures they've engaged in. now, so what this board does is basically identifies best practices and says let's use the purchasing power of medicare and medicaid to help to institutionalize all these good things that we do. and the fact of the matter is that when obama care is fully implemented we're going to be in a position to show that costs are going down. and over the last two years health care premiums have gone up, it's true, but they've gone up slower than any time in the last 50 years. so we're already beginning to see progress. in the meantime, folks out there with insurance, you're already getting a rebate. let me make one last point. governor romney says we should

replace it. i'm just going to repeal it but we can replace it with something. but the problem is he hasn't described what exactly we'd replace it with other than saying we're going to leave if to the states. but the fact of the matter is some of the prescriptions that he's offered like letting you buy insurance across state lines, there's no indication that that somehow is going to help someone who's got a pre-existing condition be able to finally buy insurance. in fact, it's estimated that by repealing obama care you're looking at 50 million people losing health insurance at a time when it's vitally important. >> let's let the governor explain what you would do if obama care is repealed. how would you replace it? >> actually, it's a lengthy description but number one, pre-existing conditions are covered under my plan. number two, young people are able to stay on their family plan. that's already offered in the private marketplace. you don't have to have the government mandate to for that to occur. but let's come back to something

the president and i agree on, which is the key task we have in health care is to get the costs down so it's more affordable for families, and then he has as a model for doing that a board of people at the government, an unelected board, appointed board who are going to decide what kind of treatments you ought to have. >> no, that's -- >> in my opinion, the government is not effective in bringing down the cost of almost anything. as a matter of fact, free people and free enterprises trying to find ways to do things better are able to be more effective in bringing down the cost than the government will ever be. your example at the cleveland clinic is my case in point, along with several others i could describe. this is the private market. these are enterprises competing with each other, learning how to do better and better jobs. i used to consult to businesses -- excuse me, to hospitals and to health care providers. i was astonished at the creativity and innovation that exists in the american people. in order to bring the cost of

health care down, we don't need to have a board of 15 people telling us what kinds of treatments we should have. we instead need to put insurance plans, providers, hospitals, doctors on targets such that they have an incentive, as you say, performance pay for doing an excellent job for keeping costs down, and that's happening. intermountain health care does it superbly well. >> they do. >> mayo clinic is doing it superbly well. cleveland clinic. others. but the right answer is not to have the federal government take over health care and start mandating to the providers across america, telling a patient and a doctor what kind of treatment they can have. that's the wrong way to go. the private market and individual responsibility always work best. >> let me just point out first of all this board that we're talking about can't make decisions about what treatments are given. that's explicitly prohibited in the law. but let's go back to what governor romney indicated, that under his plan he would be able

to cover people with pre-existing conditions. well, actually, governor, that isn't what your plan does. what your plan does is to duplicate what's already the law, which says if you are out of health insurance for three months then you can end up getting continuous coverage and insurance company can't deny you if it's been under 90 days. but that's already the law, and that doesn't help the millions of people out there with pre-existing conditions. there's a reason why governor romney set up the plan that he did in massachusetts. it wasn't a government takeover of health care. it was the largest expansion of private insurance. but what it does say is that insurers, you've got to take everybody. now, that also means that you've got more customers. but when governor romney says that he'll replace it with something but can't detail how

it will be in fact replaced and the reason he set uphe system he did in massachusetts is because there isn't a better way of dealing with the pre-existing conditions problem, it just reminds me of he says that he's going to close deductions and loopholes for his tax plan. that's how it's going to be paid for. but we don't know the details. he says that he's going to replace dodd-frank, wall street reform. but we don't know exactly which ones. he won't tell us. he now says he's going to replace obama care and assures that all the other things that are in it are going to be in there and you don't have to worry. and at some point i think the american people have to ask themselves is the reason that governor romney is keeping all these plans to replace secret because they're too good? is it because somehow middle-class families are going to benefit too much from them? no. the reason is because when we reform wall street, when we

tackle the problem of pre-existing conditions, then you know, these are tough problems. and we've got to make choices. and the choices we've made have been ones that ultimately are benefiting middle-class families all across the country. >> we're going to move -- >> i have to respond to that, which is my experience as a governor is if i come in and lay down a piece of legislation and say it's my way or the highway i don't get a lot done. what i do is the same way that tip o'neill and ronald reagan worked together some years ago, when ronald reagan ran for office he laid out the principles that he was going to foster. he said he was going to lower tax rates. he said he was going to broaden the base. you've said the same thing. you're going to simplify the tax code, broaden the base. those are my principles. i want to bring down the tax burden on middle-income families. and i'm going to work together with congress to say okay, what are the various ways we could bring down deductions, for instance? one way, for instance, would be to have a single number. make up a number. 25,000.

$50,000. anybody can have deductions up to that amount. and then that number disappears for high-income people. that's one way one could do it. one could follow bowles-simpson as a model and take deduction by deduction and make difference that's way. there are alternatives to accomplish the objective i have, which is to bring down rates, broaden the base, simplify the code, and create incentives for growth. and with regards to health care, you have remarkable details with regards to my pre-existing condition plan. you obviously studied up on my plan. in fact, i do have a plan that deals with people with pre-existing conditions. that's part of my health care plan. and what we did in massachusetts is a model for the nation state by state. and i've said that at that time. the federal government taking over health care for the entire nation and whisk's aside the 10th amendment, which gives states the rights for these kinds of things, is not the course for america to have a stronger, more vibrant economy. >> that is a terrific segue to our next segment, and that is

the role of government. let's see. role of government. and it is -- you are first on this, mr. president. and the question is this. do you believe -- both of you. but you have the first two minutes on this, mr. president. do you believe there's a fundamental difference between the two of you as to how you view the mission of the federal government? >> well, i definitely think there are differences. the first role of the federal government is to keep the american people safe. that's its most basic function. and as commander in chief that is something that i have worked on and thought about every single day that i've been in the oval office. but i also believe that government has the capacity, the federal government, has the capacity to help open up opportunity and create ladders of opportunity and to create frameworks where the american people can succeed. look, the genius of america is

the free enterprise system and freedom. and the fact that people can go out there, start a business, work on an idea, make their own decisions. but as abraham lincoln understood, there are also some things we do better together so in the middle of the civil war abraham lincoln said let's help to finance the transcontinental railroad. let's start the national academy of sciences. let's start land grant colleges. because we want to give these gateways of opportunity for all americans, because if all americans are getting opportunity we're all going to be better off. that doesn't restrict people's freedom. that enhances it. and so what i've tried to do as president is to apply those same principles. and when it comes to education, what i've said is we've got to reform schools that are not working. we use something called race to the top.

it wasn't a top-down approach, governor. what we've said to states is we'll give you more money if you initiate reforms. and as a consequence you had 46 states around the country who have made a real difference. but what i've also said is let's hire another 100,000 math and science teachers to make sure we maintain our technological lead and our people are skilled and able to succeed. and hard-pressed states right now can't all do that. in fact, we've seen layoffs of hundreds of thousands of teachers over the last several years. and governor romney doesn't think we need more teachers. i do. because i think that that is the kind of investment where the federal government can help. it can't do it all. but it can make a difference. and as a consequence we'll have a better-trained workforce and that will create jobs because companies want to locate in places where we've got a skilled workforce. >> two minutes, governor, on the role of government. your view. >> well, first, i love great schools. massachusetts our schools are ranked number one of all 50 states. and the key to great schools,

great teachers. so i reject the idea that i don't believe in great teachers or more teachers. every school district, every state should make that decision on their own. the role of government. look behind us. the constitution and the declaration of independence. the role of government is to promote and protect the principles of those documents. first, life and liberty. we have a responsibility to protect the lives and liberties of our people. and that means a military second to none. i do not believe in cutting our military. i belve in maintaining the strength of america's military. second, in that line that says we are endowed by our creator with our rights, i believe we must maintain our commitment to religious tolerance and freedom in this country. that statement also states that we are endowed by our creator with the right to pursue happiness as we choose. i interpret that as, one, making sure that those people who are less fortunate that can't care for themselves are cared by one another. we're a nation that believes

we're all children of the same god, and we care for those that have difficulties, those that are elderly and have problems and challenges, those that are disabled. we care for them. and we look for discovery and innovation. all these things out of the american heart to provide the pursuit of happiness for our citizens. but we also believe in maintaining for individuals the right to pursue their dreams. and not to have the government substitute itself for the rights of free individuals. and what we're seeing right now is in my view a trickle-down government approach which has government thinking it can do a better job than free people pursuing their dreams. and it's not working. and the proof of that is 23 million people out of work. the proof of that is one out of six people in poverty. the proof of that is we've gone from 32 million on food stamps to 47 million on food stamps. the proof of that is that 50% of college graduates this year can't find work. we know that the path we're taking is not working. it's time for a new path. >> all right. let's go through some specifics

in terms of what -- how each of you views the role of government. education. does the federal government have a responsibility to improve the quality of public education in america? >> well, the primary responsibility for education is of course at the state and local level. but the federal government also can play a very important role. and i agree with secretary arne duncan. some ideas he's put forward on race to the top. not all of them but some of them i agree with and congratulate him for pursuing that. the federal government can get local and state schools to do a better job. my own view, by the way, is i've added to that. i happen to believe i want the kids that are getting federal dollars from i.d.e.a. or title one, these are disabled kids or poor kids or lower-income kids, rather, i want them to be able to go to the school of their choice. so all federal funds, instead of going to the state or to the school district, i'd have go, if you will, follow the child and have the parent and child decide where to send their student. >> how do you see the federal

government's responsibility to, as i say, to improve the quality of public education in this country? >> well, as i've indicated, i think it has a significant role to play. through our race to the top program we've worked with republican and democratic governors to initiate major reforms, and they're having an impact right now. >> do you think you have a difference between your views and those of governor romney about education? >>'s >> this is where budgets matter because budgets reflect choices. so when governor romney indicates that he wants to cut taxes and potentially benefit folks like me and him and to pay for it we're having to initiate significant cuts in federal support for education, that makes a difference. his running mate, congressman ryan, put forward a budget that reflects many of the principles that governor romney's talked about. and it wasn't very detailed. this seems to be a trend.

but what it did do is to, if you extrapolated how much money we're talking about, you'd look at cutting the education budget by up to 20%. when it comes to community colleges, we are seeing great work done out there all over the country because we have the opportunity to train people for jobs that exist right now. one of the things i suspect governor romney and i probably agree on is getting businesses to work with community colleges so that they're setting up their training programs -- >> do you agree, governor? >> let me just finish the point. i suspect there will be -- >> my state, by the way. >> where they're partnering so that -- they're designing training programs and people who are going through them know that there's a job waiting for them if they complete it. that makes a big difference. but that requires some federal support. let me just say one final example. when it comes to making college affordable, whether it's two-year or four-year, one of the things that i did as

president was we were sending $60 billion to banks and lenders as middlemen for the student loan program. even though the loans were guaranteed. so there was no risk for the banks or the lenders. but they were taking billions out of the system. and we said why not cut out the middleman? and as a consequence what we've been able to do is provide millions me students assistance, lower or keep low interest rates on student loans, and this is an example of where our priorities make a difference. governor romney, i genuinely believe cares about education. but when he tells a student that you know, you should borrow money from your parents to go to college, you know, that indicates the degree to which there may not be as much of a focus on the fact that folks like myself, folks like michelle, kids probably who attend university of denver just don't have that option, and for us to be able to make sure that

they've got that opportunity and they can walk through that door that is vitally important not just to those kids. it's how we're going to grow this economy over the long term. >> we're running out of time, gentlemen. >> jim. >> a chance to respond to >> mr. president, you're entitled as a president to your own airplane and your own house but not to your own facts. i'm not going to cut education funding. i don't have any plan to cut education funding. and grants going to people going to college i'm plan on continuing to grow. so i'm not planning on making changes there. but you make a very good point, which is the place you put your money makes a pretty clear indication of where your heart is. you put $90 billion into green jobs. and look, i'm all in favor of green energy. $90 billion. that would have hired 2 million teachers. $90 billion. and these businesses, many of them are going out of business. i think about half of them, of the ones that have been invested in have gone out of business. a number of them happen to be owned by people who were

contributors to your campaigns. look, the right course for america's government -- we're talking about the role of government -- is not to become the economic player picking winners and losers, telling people what kind of health treatment they can receive, taking over the health care system that has existed in this country for a long, long time and has produced the best health records in the world. the right answer for government is to say how do we make the private sector become more efficient and more effective? how do we get schools to be more competitive? let's grade them. i propose we grade our schools. so parents know which schools are succeeding and failing. so they can take their child to a school that's being more successful. i don't want to cut our commitment to education. i want to make it more effective and efficient. and by the way, i've had that experience. i don't just talk about it. i've been there. massachusetts schools are ranked number one in the nation. this is not because i didn't have commitment to education. it's because i care about education for all of our kids. >> all right, gentlemen, i -- >> excuse me one second.

excuse me, sir. we barely have three minutes left. i'm not going to grade the two of you and say your answers have been too long or i've done a poor job. >> you've done a great job, jim. >> oh, well -- no. but the fact is the role of governing and governing, we've lost a pod, in other words. so we only have three minutes left in the debate before we go to your closing statements. so i want to ask finally here, and remember, we've got three minutes total time here. and the question is this. many of the legislative functions of the federal government right now are in a state of paralysis as a result of partisan gridlock. if elected in your case, if re-elected in your case, what would you do about that? governor? >> jim, i had the great experience, it didn't seem like it at the time, of being elected in a state where my legislature was 87% democrat. and that meant i figured out from day one i had to get along

and i had to work across the aisle to get anything done. we drove our schools to be number one in the nation. we cut taxes 19 times. >> what would you do as president? >> as president i will sit down on day one -- actually, a day after i get elected. i'll sit down with leaders, the democratic leaders as well as republican leaders and continue -- as we did in my state. we met every monday for a couple of hours, talked about the issues and the challenges in our state in that case. we have to work on a collaborative basis. not because we're going to compromise our principle but because there's common ground. and the challenges america faces right now -- look, the reason i'm in this race is there are people that are really hurting today in this country. and we face this deficit could crush the future generations. what's happening in the middle east. there are developments around the world that are of real concern and republicans and democrats both love america but we need to have leadership. leadership in washington that will actually bring people together and get the job done and could not care less if it's a republican or a democrat.

i've done it before. i'll do it again. >> mr. president. >> first of all, i think governor romney's going to have a busy first day because he's also going to repeal obama care, which will not be very popular among democrats as you're sitting down with them. but look, my philosophy has been i will take ideas from anybody, democrat or republican, as long as they're advancing the cause of making middle-class families stronger and giving ladders of opportunity to the middle class. that's how we cut taxes for middle-class families and small businesses. that's how we cut a trillion dollars of spending that wasn't advancing that cause. that's how we signed three trade deals into law that are helping us to double our exports and sell more american products around the world. that's how we repealed don't ask, don't tell. that's how we ended the war in iraq as i promised. and that's how we're going to wind down the war in afghanistan. that's how we went after al qaeda and bin laden. so we've seen progress even under republican control of the

house of representatives. but ultimately, part of being principled, part of being a leader is, a, being able to describe exactly what it is that you intend to do. not just saying i'll sit down. but you have to have a plan. number two, what's important is occasionally you've got to say no. to folks both in your own party d in the other party. and you know, yes, have we had some fights between me and the republicans when they fought back against us reining in the excesses of wall street? absolutely. because that was a fight that needed to be had. when we were fighting about whether or not we were going to make sure that americans had more security with their health insurance and they said no, yes, that was a fight that we needed to have. >> all right. >> and so part of leadership and governing is both saying what it is that you are for but also being willing to say no to some things. and i've got to tell you, governor romney, when it comes to his own party during the course of this campaign, has not displayed that willingness to say no to some of the more

extreme parts of his party. >> that brings us to closing statements. there's a coin toss. governor romney, you won the toss, and you elected to go last. so you have a closing two minutes, mr. president. >> well, jim, i want to thank you. and i want to thank governor romney because i think this was a terrific debate and i very much appreciate it. and i want to thank the university of denver. you know, four years ago we were going through a major crisis, and yet my faith and confidence in the american future is undiminished. and the reason is because of its people. because of the woman i met in north carolina who decided at 55 to go back to school because she wanted to inspire her daughter and now has a job from that new training that she's gotten. because of a company in minnesota who was willing to give up salaries and perks for their executives to make sure that they didn't lay off workers during a recession. the auto workers that you meet

in toledo or detroit take such pride in building the best cars in the world. not just because of a paycheck but because it gives them that sense of pride, that they're helping to build america. and so the question now is how do we build on those strengths? and everything that i've tried to do. and everything that i'm now proposing for the next four years in terms of improving our education system or developing american energy or making sure that we're closing loopholes for companies that are shipping jobs overseas and focusing on small businesses, companies that are creating jobs here in the united states, or closing our deficit in a responsible, balanced way that allows us to invest in our future. all those things are designed to make sure that the american people, their genius, their grit, their determination is channeled and they have an opportunity to succeed. and everybody's getting a fair shot and everybody's getting a fair share. everybody's doing a fair share and everybody's playing by the same rules.

you know, four years ago i said that i'm not a perfect man and i wouldn't be a perfect president. and that's probably a promise that governor romney thinks i've kept. but i also promised that i'd fight every single day on behalf of the american people and the middle class and all those who are striving to get in the middle class. i've kept that promise. and if you'll vote for me, then i promise i'll fight just as hard in the second term. >> governor romney, your two-minute closing. >> thank you, jim, and mr. president, and thank you for tuning in this evening. this is a -- this is an important elecon. and i'm concerned about america. i'm concerned about the direction america has been taking over the last four years. i know this is bigger than an election about the two of us as individuals. it's bigger than our respective parties. it's an election about the course of america, what kind of america do you want to have for yourself and for your children. and there really are two very different paths that we began speaking about this evening. and over the course of this month we're going to have two

more presidential debates and a vice presidential debate. we'll talk about those two paths. but they lead in very different directions. and it's not just looking to our words that you have to take in evidence of where they go. you can look at the record. there's no question in my mind that if the president were to be re-elected you'll continue to see a middle-class squeeze with incomes going down and prices going up. i'll get incomes up again. you'll see chronic unemployment. we've had 43 straight months with unemployment above 8%. if i'm president, i will create -- help create 12 million new jobs in this country with rising incomes. the president's re-elected, obama care will be fully installed. in my view that's going to mean a whole different way of life for people who counted on the insurance plan they had in the past. many will lose it. you're going to see health premiums go up by some $2,500 per family. if i'm elected, we won't have obama care. we'll put in place the kind of principles that i've put in place in my own state and allow each state to craft their own programs to get people insured, and we'll focus on getting the cost of health care down.

if the president were to be re-elected, you're going to see a $716 billion cut to medicare. you'll have 4 million people who will lose medicare advantage. you'll have hospitals and providers that will no longer accept medicare patients. i'll restore that $716 billion to medicare. and finally, military. the president's re-elected, you'll see dramatic cuts to our military. the secretary of defense has said these would be even devastating. i will not cut our commitment to our military. i will keep america strong and get america's middle class working again. thank you, jim. >> thank you, governor. thank you, mr. president. the next debate will be the vice presidential event on thursday october 11th at centre college in danville, kentucky. for now from the university of denver i'm jim lehrer. thank you, and good night. >> we will continue to watch what happens on stage. the embrace between the two men. after a 90-plus-minute debate

moderated by jim lehrer. now the greetings of both spouses. again, it is the obamas' 20th wedding anniversary tonight. watching along with us has been our team. david gregory, the moderator of "meet the press." social media. everybody with a twitter account has opined already. it appeared that an energetic mitt romney showed up for this face time tonight before a national audience. >> energetic, aggressive, came like he understood that the stakes were high, that he's behind in this race. and what a contrast, brian. president obama looked like a president who felt he had a pretty comfortable lead in the polls and wanted to stay above the fray. decidedly unfeisty in his approach. a lot of people felt he was not very crisp in his presentation, perhaps should have been more crisp after four years in the white house. governor chris christie on "meet the press" sunday said there would be a different narrative in this race come thursday morning. i think a lot of republicans are going to feel that that's indeed

the case. >> very interesting scene playing out here on the stage. really the first time these two families have had the time and occasion to spend time with each other after what has already been such a long, long campaign. now they'll basically go back after collecting notes at their lecterns to their separate camps. savannah guthrie with us. same question. >> well, there's no question that both campaigns looked at this as an opportunity more precious than gold, to have an unfiltered audience for 90 minutes in the heat of the campaign. and it was clear what mitt romney set out to do, be conversational, be crisp, and also be human. he was clearly not going to let the president or the democrats hang on him this notion that he is somebody who wants to tax -- cut taxes for the wealthy only. he talked in anecdotal terms. as did the president, actually. so both of them were trying to lay this claim to the middle class. one thing an obama adviser e-mailed me was that romney came

out strong, but they said it was well rehearsed. >> out to denver we go. our political director chuck todd. chuck, first of all, how did it play in the room? and second, your impressions of what a national audience will take away, how this changes things going into the next two gatherings between these two men. >> i think one thing that's going to change is i think you're going to see team obama buckle down more. they went through a lot of mock debates supposedly, but he did seem to come out and wasn't crisp, sort of missed some obvious places that on the campaign stump he has gone after mitt romney, whether it was on medicare or dodd-frank, and seemed to almost at times sort of lose his train of thought about where he was going to go or decided not to go there. what was interesting about mitt romney is everything he -- everything he had to accomplish tonight he did. i think the bone of contention that the obama folks have been trying to put out there is that he doesn't have any details, doesn't put any details on his

plan. those were out there. you may not like the details. it's a pretty stark choice that may have been presented. but he came across as somebody who knew his stuff, who knew the president's proposals. and again, you can agree or disagree about how those proposals are supposed to work. but that was an important bar for mitt romney to cross because there's been a lot of money being spent by the obama campaign saying he's not telling you anything, he's not telling you, he's hiding these things. and instead you saw mitt romney, he looked like a credible alternative tonight. very important for him. very important for his party. remember, a lot of republicans were hoping this would be the performance he would turn in. so all in all, a big -- i think a big night for mitt romney and one you're going to see the president's team have to go back to the drawing board a little bit for the second debate. >> two points here. number one, in 34 separate states voting has already been under way before tonight's event started. number two, for those interesting -- interested in a

thorough fact checking of all the withering facts on both sides we heard tonight, that segment will be coming up in just a bit. andrea mitchell is heading up our team working on that. tom brokaw is another member of our team in the arena, in denver. and tom, the conventional wisdom has a way of kind of bubbling up these days during the event. and i imagine one of the plot lines tomorrow will be here's mitt romney, as we said, energized, coming right from the game. he has been in an active, very active campaign heretofore, and the president has been on the job in that realm during this whole time. >> well, governor romney did spend a lot of time preparing for this debate, and it paid off. he had a well-organized narrative. he knew his brief. and this was the candidate that the republican party's been waiting to show up, as a matter of fact. and a lot of businessmen that i've talked to that have dealt with mitt romney in the past

have been bewildered by his performance as a candidate. but this is the mitt romney that they described to me as he sat down at a table and did a deal. he had a cycle of themes that he wanted to keep coming back to. the objective realities of the economy and what's going on within it. the fact that he would not raise taxes, he insisted, on the middle class. he accused the president at one point of not knowing what he was talking about when it came to deductions for jobs overseas. and at the conclusion he came back again to the whole idea that he thinks the private sector can do a much better job than the federal government can do and that the president has not delivered on his own promises of four years ago. the president has a tough brief to defend, on the other hand. the economy is still not in very good shape. obama care, however you may feel about it, is a complex piece of legislation. so tonight probably, and i don't like to make these kind of judgments generally, tonight will gladden the hearts of a lot of the republican opetives and the people who are working for

him in the states around the country. the big issue is what does it do to the undecide who'd are out there, the independents who are still making up their minds? my guess-s brian, as we talked about earlier on the nightly news, i think there are a lot of people who say they're for obama or romney right now but can still be persuaded between now and the first tuesday in november. remember, we've got two more of these debates coming up. but tonight was a big, big start for governor romney. >> and the next one up of course the vice presidential debate. david gregory, because this was at the end of the day, despite the high stakes, a television show tonight watched by perhaps north of 50 million americans, there is a new half generation of americans coming to this, seeing the format, the stagecraft, the question pods, as jim lehrer in the thankless job, let's put that out, of moderator pointed out. how do you think that will be received? and what's been said so far tonight on social media about it? >> well, you know, it's a good

question because i think part of this, as tom alludes to, is what about the undecided voter? do we get to the truth of the matter here? the truth is it's very difficult to get to that. in part because it would be better if there was a little more follow-up. it would be better if they could engage each ooshs interrupt each other a little bit, so we could get to the bottom of something instead of just a list of particulars and some of their talking points. that's the limit here. so we do focus more on who had more energy, who's more engaging. but the bottom line is that through all of that you had in a challenger tonight someone who was feisty, who was long on ideas and vision, and it does remind me a little bit of bush-kerry 2004, an incumbent who falls into that trap of saying look, i know this material, i've actually governed, and doesn't seem quite as sharp. and again, this was about getting a second look for mitt romney. i think he's earned that tonight. >> we're going to fit a break in here. and when we come back, we're going to hear from surrogates with both campaigns. and we'll have our look at some of the facts we heard on stage

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we are back. our coverage continues of the debate we just witnessed from the campus of the university of denver. tonight we want to hear from some key surrogates of both camps. on the republican side, senator kelly ayotte out of the state of new hampshire. and david axelrod, senior adviser to the obama campaign, standing by. senator, first to you. was what you were chasing tonight, you meaning the romney camp, an escap from that -- the 47% remarks on tape tha has haunted this campaign in the last couple of days, trying to convert that into a good performance tonight? >> well, what we saw tonight,

what the american people saw is those of us that know governor romney. we saw a strong, effective leader with great command of the facts and someone with a vision for our country to get people working again, to have a stronger middle class, and also to get our deficit under control, to make sure that it's brighter for the future for our children and our grandchildren. so he was very much very strong tonight and had a vision and a plan for america to turn this around and to make sure that we preserve the american dream. >> senator, if the president had a recurring theme in rebuttal, it was his complaint about the lack of facts, the lack of specificity. do you think there's any traction there? and secondarily, do you think there's a chance to fine-tune that in the two remaining gatherings? >> brian, i don't think there's any traction to that because it was governor romney tonight who offered a clear vision and plan. he had a five-point plan for turning the economy around on every major issue including the deficit and the debt. he had a plan to turn it around.

and what was stunning is the president, and you think about it, in an hour and a half couldn't defend his own record. we didn't hear anything about the stimulus or the policies that he put forward. >> senator kelly otte, thank you very much for being with us tonight from what they affectionately call the spin room out in denver. >> that's right. >> and now to david axelrod. david, i want to read ron fornier tonight in "national journal," "call it the curse of incumbency like many of his predecessors, president obama fell victim wednesday night to high expectations, a short fuse, and a hungry challenger." guilty as charged? >> well, look, there's no doubt he has a hungry challenger. governor romney's always been good on the attack. we saw that during the primaries. what he's not very good at is offering specifics about his plans. he tried to deny his $5 trillion tax cut. but that's what he's offered, brian. he's offered to bring down corporate rates to 25%. offered a 20% across the board income tax cut. and he has no plan to pay for it.

he wants to spend $2 trillion more on defense. no plan to pay forit. he says he's going to roll back obama care and wall street reform. no plan for what he would replace it with. so all night long he was -- i give him style points. what he would be graded down on is the substance of what he was talking about. he did also double down on turning medicare into a voucher program. and i think a lot of americans have deep concerns about that. so i think when everybody wakes up tomorrow morning they're going to take a look at what governor romney sxad they're going to say is this really the direction to lead america? $7 trillion in new unpaid for debt and voucherizing medicare. repealing obama care and starting that whole process over, replacing it with we don't know what, and walking away from wall street reform. that's not a prescription for a better future. >> david, let me ask this a different way because what we've been saying, perhaps north of 50 million americans watched

tonight. as a television presentation, as the first chance to see these two men, their two faces, their demeanors side by side, would your advice to your boss be do the same thing next time, present the same president obama as you presented tonight, or would you counsel the president, your boss, to make some changes? >> look, brian, people know the president. this is not -- mitt romney's reintroducing himself constantly to the american people. the american people know the president. they know that he's earnestly fighting for the middle class, that he believes in a balanced way forward where we reduce our deficit, still invest in education, and the other things that we need to grow this economy. and they know whose side he's on. so i would counsel him with regard to seeing who he is, keep fighting for people. >> so you're perfectly happy with his demeanor and his energy level tonight? >> what i'm happy with is the path he wants to lead this country on. and what's very clear is the contrast with what we saw on the

other side. we have a balanced way forward or we can go back to what we were doing before, and we know where that ended, in an economic catastrophe. and no matter how energetically governor romney presents his case, that is where he wants to lead the country. >> all right. david axelrod, thank you for joining us from the spin room in denver, which brings us to the various sets of facts we heard tossed about side to side tonight on that stage. andrea mitchell and her team have had the unsavory job of going through the stacks of evidence tonight. andrea? >> well, as we were going through our fact checking, so were thousands on twitter. no accident that big bird has been trending on twitter. tonight the two men did tangle over taxes. mitt romney objected to president obama's claim that his tax cuts would cost $5 trillion. so where did that figure come from? >> let me repeat what i said. >> all right. >> i'm not in favor of a $5 trillion tax cut. that's not my plan. my plan is not to put in place any tax cut that will add to the deficit.

>> romney has proposed making the bush tax cuts permanent for all income levels and then cutting all rates an additional 20%. he would repeal the alternative minimum tax and permanently repeal the estate tax. the non-partisan tax policy center concluded that mitt romney's tax plan would cost $4.8 trillion over ten years. romney said again tonight that his plan would be paid for. but to pay for those cuts he would have to close loopholes in the tax code and get rid of some tax deductions, he said, and credits. but he's repeatedly refused to say which deductions he would get rid of, saying that he would work with congress to make those decisions. also tonight, president obama said that his plan would cut the deficit by $4 trillion. >> we all know that we've got to do more. and so i've put forward a specific $4 trillion deficit reduction plan. it's on a website. you can look at all the numbers. what cuts we make and what revenue we raise. >> that estimate comes from the

left-leaning center on budget and policy priorities. $3.8 trillion to be exact over ten years. the president is counting money saved by letting the bush tax cuts expire for people making more than $250,000 a year. but he's also counting $1 trillion in savings over ten years by drawing down the wars in iraq and afghanistan. the bipartisan non-profit committee for responsible federal budget has called that a gimmick because those wars were deficit-financed in the first place. and the president is also counting on savings agreed to last year when the white house and congress agreed to raise the debt ceiling. mitt romney claimed tonight that president obama's health reform would take $706 billion -- 16 billion dollars out of medicare. >> what i support is no change for current retirees and near-retirees to medicare. and the president supports taking $716 billion out of that program. >> in fact, under the president's health reform law that $716 billion comes from trimming planned future

increases over the next decade, not from cutting funding. the trim from payments to health care providers and insurers do not cost seniors more. and medicare's chief actuary says that mr. obama's health reform "substantially improves the program's finances." mitt romney's claim that his plan would not change anything for seniors and near-retirees is true. his changes would not affect anyone currently over the age of 55. tonight the president made a claim about social security. >> social security is structurally sound. it's going to have to be tweaked the way it was by ronald reagan and speaker -- democratic speaker tip o'neill. but the basic structure is sound. >> president o'said thabama sai like medicare social security does not have to be fixed to remain solvent but acourting to the congressional budget office social security will run into financial trouble too. by 2030 the amount social security pays out will exceed the tax revenue coming in.

so in about 20 years the program will not be able to pay for itself through the payroll tax that's we all pay in. so brian, the debate will continue on twitter and everywhere else as these facts are checked and counterchecked. >> all right, andrea mitchell, after a long night's work. hard to believe it was just 90 minutes of debate because there's an even longer list than that of disputed facts. savannah guthrie, if we were courtroom lawyers, between the two of us, you're the lawyer, after all, we'd come off of a brief conversation there with david axelrod, turn to the judge and say your honor, we have no choice but to assume that they are happy with the president's performance tonight. what you also are is a former white house correspondent. what's really going to go on? >> as a lawyer i might say that answer is non-responsive. he didn't come right out and say we're thrilled with the president's performance. of course he can't say that. what he's saying is that on substance that he thinks the president's arguments outweigh mitt romney's. no question this was mitt romney's night on style, on kind of resetting where the campaign

was. and that's a question i think we have to step out and ask ourselves. did this night fundamentally alter the trajectory of the race? for mitt romney he needed to play for more time. where the polls are going into this race, where the president was starting to open up a lead. he needed people not to close their minds and not give him a chance and tune him out. he may have gotten another chance. and president obama needed to close the sale, and he didn't do that tonight. >> chuck todd out in the spin room in denver. to savannah's pot, the romney campaigns need to play for time. and the numbers that are still out there and able to be on the move despite, as we keep pointing out, the fact that voting, chuck, is under way in 34 out of the 50 states. >> but look, there is some fluidity. we know that there is some places, particularly in some of the battleground states, virginia and florida and colorado where we are tonight, in particular where the president hadn't been opening up a lead. yes, he's doing well in the midwest but he hadn't been

there. but a couple of larger observations. let's not let it get lost. this was as substantive of a debate of a presidential level, and brian i would challenge this, i think in the modern television era. these guys got into the weeds. and again, they've had some disagreement over their set of facts, but they got into some specific detail on tax policy and on medicare that i don't think we've ever heard in a presidential debate before, and it does create the stark choice. and what's interesting here is six months ago the president obama campaign plan was we want to make sure this election's not a referendum on a choice. tonight mitt romney's campaign plan was hey, we still want to prove that there's a choice. and there was a lot of time being spent debating mitt romney's plan. and in an odd way while the obama folks think long term that will help them create contrasts and comparatives, short-term it elevates romney to sort of presidential ideas and allows that voter to say can i picture that guy in the big chair, brian? >> and tom brokaw, i'm guessing you concur that the victory from

tonight is for substance. say what you will, yes, there's going to be spin. yes, these are two guys on different sides of the ideological aisle. we've got a good substantive airing tonight. especially on the economy. of the issues we set out to discuss. >> this is what a debate should be about. let the two candidates go after each other. they both came prepared knowing they were going to have to close the case, if you will, with the american people. i think there's a consensus at this hour at least that governor romney, whether or not you agree with his policies, marshalled his facts in a more coherent fashion than the president did. hailey barbour, who's one of the great republican party strategists, former governor of the state of mississippi, former republican national chairman, said to a group of people earlier this summer, look, what governor romney has to do is persuade the people who hired president obama for that job that they now have to fire him. up to tonight he has not been successful in that.

the question is did he begin to move in that direction? this format worked for him very well, it seems to me, in terms of all the preparation that he had because it was a narrative that you could follow from a to b all the way through z. the president wandered around the landscape a lot more. so it will be very interesting to see what the reaction is beyond the twitter universe tomorrow when we go into the battleground states. and especially as chuck just said, here in the state of colorado, which is a very close race and a battleground state. >> david gregory, give us a p i preview for the viewers who are going to be joining us for the next three. the vice presidential and presidential. what are the subjects remaining? >> well, medicare's going to be big, especially in the vice presidential. but foreign policy as well. that's where the obama administration's on the defensive about libya. but i think the entire obama team and the vice president are going to get a lot feistier here. i mean, the president made a decision not to get in romney's face a little bit more, stop him, disagree with him. he didn't bring up the 47%. he had a whole, you know, area

to discuss the role of government, and he didn't talk about a philosophical divide. i think they are now going to go become a lot more aggressive because they see an aggressive challenger and it's not enough to d rope-a-dope and sit back and try to sit on a lead. so i think there's going to be a different thought process that goes on. >> zpsavannah, were you surpris we didn't hear the number 47? >> i was. as a matter of fact, an obama adviser told me earl yes today we're not going to play it safe, don't believe those stories we're playing not to lose. but i think that's what we saw the president doing. the other thing he needs to do is really it's the unfinished business of this campaign, is tell the american people what the unfinished business of this presidency. why does he need another four years to accomplish what he needs to accomplish? i'm not sure we heard a very crisp and coherent message from the president on that tonight. >> andrea mitchell, one last word from you out in denver. this is james fallows writing at atlantic.com tonight. "if you had the sound turned off, romney looked calm and affable for more of the debate than the president did.

the incumbent president looked more peeved. romney's default expression, whether genuine or forced, was a hint of a smile. obama's was a kind of a scowl koech." a kind of reminder that again we're watching a television event that had the added advantage of having real substance tonight. >> exactly. and romney was communicating a different kind of affect. and that is very important. as you know, going all wait back to 1960, this is television. it will be interesting to see if he can carry that out in the town hall format for the next presidential debate. >> all right. andrea mitchell, who spent the evening going through facts for us in denver. david gregory, one more whack at what may be happening in the circles around these candidates. i guess if you're the president's team do you review tape like an nfl team? >> yeah. i think partially they'll do that. just to make him crisper. i think part of what they've tried to do all along is

disqualify romney as a credible alternative. as chuck alluded to, you're elevated when you're on the stage with the president. so i think that's where they try to go to work. and they're going to hammer away at a lot of those specifics, too, in campaign ads and on the stump. >> there wl be more coverage on your late local news and of course tomorrow morning on "today." we'll have a wrap-up, the day's analysis, and perhaps how this shakes out politically in some of the those battleground states tomorrow evening on nbc "nightly news." for our teams from denver to washington to new york, for everyone here at nbc news, i'm brian williams. good night.